Centre to tackle card fraudsters

Monitoring cell will keep tab on criminals

Centre to tackle card fraudsters

The cell, to be formed by the Union finance ministry in association with the Reserve Bank of India, will put in place an intelligence network that will maintain surveillance on potential criminal elements perpetrating credit card frauds which also includes identity thefts.

Besides, the cell will recommend steps that domestic banks and credit card issuing institutions might like to follow to plug data breaches that potentially expose millions of credit and debit card-holders to the risk of fraud and identity thefts.

The risks of credit card frauds is likely to increase as users adopt newer forms of transactions, including those done online.

According to data compiled by the Reserve Bank as many as 16,393 fraud cases in the credit card segment (both public and private banks) involving an amount of Rs 50.28 crore have come to light in the first nine months (Jan to Sept) of 2009.

In 2006, as many as 17,258 fraud cases involving Rs 30 crore were noticed across the country. The next year,  the number of frauds cases rose to 17,294 involving Rs 38.44 crore.  A year later, various agencies of the finance ministry detected 16, 962 cases involving a total amount of Rs 44.97 crore.

According to available statistics, the number of credit card holders stood at 2.46 crore at the end of March 31, 2009.

“The proposed cell will keep a watch over across-the-board transactions in the credit card segment. While reviewing the existing mechanism to prevent misuse of credit cards it will suggest up-to-date measures to curb probable frauds,” Finance Ministry sources told Deccan Herald.

The monitoring cell will have representatives from the RBI, select public and private sector banks as well as officials from investigating agencies like the Central Bureau of Investigating (CBI) and the Enforcement Directorate which lead the Central government’s agencies empowered to probe economic offences. The modalities of inter-agency functioning are being worked out by the Finance Ministry’s Department of Financial Services.

At 77.82 lakh, the maximum number of cards have been issued by ICICI Bank, followed by another private sector leader, HDFC Bank, at 43.88 lakh. Among the public sector banks, State Bank of India has issued the highest number of credit cards at 27.23 lakh. Among foreign banks, Citibank has issued 26. 40 credit cards, followed by HSBC at 19.75 lakh and Standard Chartered at 11.45 lakh.  
           
As part of its supervisory process, the RBI has been taking measures to check frauds in the credit card segment, sources said, adding that “commercial banks that credit cards have been advised to set up internal control mechanisms to combat frauds and to take pro-active fraud control and enforcement measures.”

The banks have been advised by the RBI to ensure that credit card operations are run on “sound, prudent and profitable” lines as also fulfill “Know Your Customer” requirements, assess the credit risk of customers and maintain customer confidentiality, sources said. 

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